Insurers Overturn Fla. Restriction on Use of Credit Scoring
Southeast News • January 4, 2007
A Florida Administrative Law Judge has declared that the Florida Office of Insurance Regulation's rule restricting the use of credit information by insurers is invalid.
In a Dec. 29 ruling, Judge ...
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Subject: Do your homework
Posted On: January 4, 2007, 3:01 pm CST
Posted By: anonymous
Comment:
Without an intimate knowledge of insurance rating, it is acceptable that someone could lack an understanding of the significance of credit scoring. However, before you "point the finger" and claim that a practice is unfair, do your homework.
Consumers have been more fairly judged by their likelihood of filing claims due to the practice of credit scoring. Through multiple case studies, utilizing real data, the credit scoring is able to group individuals into a more realistic risk characteristic group. Afterall, insurance is about grouping individuals so that they may share the risk of loss across a larger field.
Would you say it is unfair that wealthy people in Florida pay a higher amount dollar-for-dollar for insurance on their homes because of the likelihood that it has a closer proximity to water? No, nobody says that - but the truth is that it has a higher probability of sustaining damage.
It is proven that the credit score works, and is a more "fair" predictor of losses than any other factor available.
Subject: Do your homework
Consumers have been more fairly judged by their likelihood of filing claims due to the practice of credit scoring. Through multiple case studies, utilizing real data, the credit scoring is able to group individuals into a more realistic risk characteristic group. Afterall, insurance is about grouping individuals so that they may share the risk of loss across a larger field.
Would you say it is unfair that wealthy people in Florida pay a higher amount dollar-for-dollar for insurance on their homes because of the likelihood that it has a closer proximity to water? No, nobody says that - but the truth is that it has a higher probability of sustaining damage.
It is proven that the credit score works, and is a more "fair" predictor of losses than any other factor available.